Following the Greenhouse Gas Tailoring Rule, the US EPA issued a proposed two new rules to address the permitting issues which the tailoring rule created. The GHG Tailoring Rule, specifies that beginning in 2011, facilities that increase GHG emissions substantially will require an air permit.

The EPA proposed two rules to ensure that businesses planning to build new, large facilities or make major expansions to existing ones will be able to obtain Clean Air Act permits that address their greenhouse gas (GHG) emissions.

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The Tailoring Rule covers large industrial facilities like power plants and oil refineries that are responsible for 70 percent of the GHGs from stationary sources. The new EPA proposals are a critical component for implementing the Tailoring Rule and would ensure that GHG emissions from these large facilities are minimized.

The Clean Air Act requires states to develop EPA-approved implementation plans that include requirements for issuing air permits. When federal permitting requirements change, as they did after EPA finalized the GHG Tailoring Rule, states likely need to modify these plans.

In the first rule, EPA is proposing to require permitting programs in 13 states to make changes to their implementation plans to ensure that GHG emissions will be covered. All other states that implement an EPA-approved air permitting program must review their existing permitting authority and inform EPA if their programs do not address GHG emissions.

Because some states may not be able to develop and submit revisions to their plans before the Tailoring Rule becomes effective in 2011, in the second rule, EPA is proposing a federal implementation plan (FIP), which would allow EPA to issue permits for large GHG emitters located in these states. This would be a temporary measure that is in place until the state can revise its own plan and resume responsibility for GHG permitting.

The EPA says that States are best-suited to issue permits to sources of GHG emissions and have long-standing experience working together with industrial facilities. EPA will work closely and promptly with states to help them develop, submit, and approve necessary revisions to enable the affected states to issue air permits to GHG-emitting sources. Additionally, EPA will continue to provide guidance and act as a resource for the states as they make the various required permitting decisions for GHG emissions.

The state of Texas finds fault with the EPA proposed regulations on a number of points, and has indicated in a letter to Administrators Jackson and Armendariz (Region 6) that Texas does not have the authority under its laws to compel the permitting of greenhouse gases, setting the stage for legal action. The merits of the issues raised by Texas will likely be sorted out in the courts.